tv On the Move Bloomberg June 17, 2014 3:00am-4:01am EDT
>> the battle for ahlstrom heats up as siemens and mitsubishi launched a counter offer. the companies are in paris to meet with the french president. to see a bidding war with ge? i will tell you in a moment. >> thank you very much. the world cloud for him is the biggest event. you have microsoft, dropbox. all the new players trying to hone in on investments. we are expecting $800 billion over the next four years. still half of americans don't understand what cloud computing is. they worry that a weather will affect your ability to get access to your data. back later.will be
european markets just opening up. let's talk to manus cranny. >> equity markets are set to bounce. you have rising equity markets around europe. auto sales a little better than estimated. one thing to bear in mind is emerging markets. you have iraq tensions rising. a small number -- a small number of troops being brought in. is there something bigger at play in emerging markets? you see the cpi. expected to come in around 1.7%. you've got two major stocks on the move in the u.k.
sales beating estimates. 4500 new hotels being created. reuters says pharmaceuticals have hired to brace themselves for the prospect of possibly being the subject of a take -- being a takeover target. easyjet has just come back from -- i have just come back from two weeks away. the whole of europe is on holiday in june. germany is going to come out a little later. then followed by the u.s. we are taking you through some of the top u.k. stocks. auto sales rose for the ninth consecutive month in a row. 1.13 new registrations.
they saw 18% in terms of sales levels. bw rose nine and a half percent. those are the big players. i want to mention shell. that just says it all. the british public are spending money and the south of europe. they are selling at 23% holding. that $5 billion it is buy back time at shell. they are to buy back their own stock for $5 million. i nearly said pounds. back to you. >> it's the holiday. seven weeks after general electric made a bid, siemens is
making a counter offer. caroline has more. --have got these the tells details. run us through the details because they are pretty complex. siemens isight. definitely not interested in the rail business. what they are interested in t is gas turbines. make the bid more attractive they have teamed up with the japanese companies mitsubishi and hit tashi who will offer 3.1 billion euros to create a joint venture for the other energy assets. finally, mitsubishi is offering 900 million euros for a 10% stake in now strum. alstom.it now strum --
assets, buts more what they needed to do was add something else to seduce the french government, so they have also decided to match ge's guaranteed to create 1000 french jobs over the next three years. >> thank you very much. that's the top corporate stories this morning. let's focus on today's biggest market movers with the chief invest and officer, where she oversees 345 again euros in assets. let's start with the geopolitical backdrop. markets are heading a little bit higher, but certainly there has been tension around the latest developments we saw over the focused areraq. how you on those geopolitical themes
right now? let's put that to one side. it seems to be relatively minor because of the inventory levels. we have seen a big move on the oil price. most investorsng were not positioned for. ithink you could still feel a bit of catch-up. you had a reduction in underweight, but they could still do more. in the short term we would be ofolved in the trimming positions. >> in terms of whether it has a fundamental influence on asset allocation, you have to wait and see how long the higher oil prices would play out for. exits of they we don't tend to forecast oil prices. it's a very difficult thing to
do. we tend to take the oil price, forecast that. we were adding some shares earlier in the year. relatively lowly valued. they have moved already. probably more on the trimming side. if you do get a prolonged period of high oil prices those would be sustained. >> are you worried about the global growth picture, the imf, perhaps because of the weather in the u.s.? if that's something you are worried about? the leading indicators seem to be suggesting a stronger picture in the second half of the year. orderrted off with a weak globally. this quarter seems to be a bit more stable. >> stay with us. president obama's middle east
following a spate of deals in the industry. we haven't independently verified that, but the stock is moving on these reports. there has been some talk about as with bid interest others in the pharmaceutical sector. up 3.7%. as unrest continues, barack obama has said in 275 military waysnnel to help as he wider military action. let's get to ryan. >> one thing that's clear is these troops will not be used in the north of iraq to take on this al qaeda offshoot. the idea is part of the troops will be used to effectively be mentors or instructors for iraqi troops on the ground. there will be a liaison role as
well. the u.s. has reconnaissance flights over iraq. the other role they will be used in is to move u.s. embassy personnel from the embassy in baghdad to the kurdish part of the country. rock, safe place to bob's which is in the south. jordan. i guess the u.s. is pretty concerned about safety inside of baghdad it self. they are keeping some embassy personnel there, but they are worried about the defense of baghdad enough that they want to move their personnel away from there. there will be some that will say, it's only a short time between this and 175,000 troops on the ground. that is what the u.s. had at its peak in 2007, but even if goals
not theclearly that's intention of the obama administration. >> what is the lay of the land on the ground? >> the iraqi military continues to strike back, mostly going after militants. it's an interesting city with 200,000 people, both sunni and shia. strategically very important for the insurgents, which just took it over after a two-day battle. it's a city you are going to be hearing a lot more about because it's the most recent city to in the insurgent campaign. other things to watch, you have a lot of people on the move in the north of iraq. 700,000 refugees. addition, that she is in baghdad are signing up en masse to fight sunni insurgents. this is going on in baghdad. remember the dramatic video we
showed you. ares enraging shias who signing up as volunteers to take on the sunni in the north of the country. element is john kerry has just said the u.s. is on an adtalk to iran hoc basis about coordinating actions in iraq itself. iranis interesting because is under sanctions and the u.s. is allied with a bunch of countries that would be uncomfortable with the idea of the united states engaging the .slamic republic of iran that's another one to watch. >> thank you for the latest on iraq. still with us is the chief investment officer lucy mcdonald. a rack.ittle bit about if we were to see more global
involvement, -- about iraq. if we were to see more global involvement, would that change? >> there is risk premium in the oil price already. >> let's have a look at some of you arevidual sectors exposed to, not necessarily through these companies. battle for this did the french business. you are interested in industrials. you think about this offering? price we are more interested in the niche industrials. we like automation. we like energy efficiency. we like aerospace. likeig conglomerates, we parts of them but generally not a whole. we think it's difficult to manage those diverse businesses.
seen.s what we have >> do you think the investors might prefer some of these large businesses to open -- to manage? >> i think they would be easier to manage. we have seen that beginning to happen. ofhink we will see some more that because it does make sense. breakups and spinoffs tend to perform better. >> pharmaceuticals are very topical at the moment because of him in a speculation ordeals materializing. some of them seem to be by profit seeking reasons. others are motivated by tax savings. by profit seeking reasons. others are motivated by tax savings. what is your feeling about this wave of m&a we are seeing? >> we have been expecting it. you see excess cash and companies that need topline
growth. it has been right for this. at the end of not this. there are some interesting new in these areas. they are all areas seeing real breakthroughs. these are drugs the larger companies would like to have. i think we will definitely see some more of this. >> stay with us. we want to turn our attention to the technology sector. we have new insights into alibaba. get prepared for what could be businessst ipo chinese in the u.s. what have we learned about alibaba's sales? >> their first-quarter earnings came in a little bit less than satisfactory.
revenue growth and their profit margin both reported a drop. also in the fourth-quarter profit growth it was only 39% compared to 71% a year earlier. that typically generates a slow economy.r the chinese that's because a lot of them choose to take the time off for the lunar new year holiday. part of the slowdown has to do with the sheer scale of alibaba. it is operating at such a massive scale right now. for them to look at new growth it takes time. also you see a migration from mobile shopping. a lot of the transactions recorded are on mobile. they are 27% of the transactions compared to 10% a year ago. these take time to develop.
thehat did we learn about planned ipo at alibaba? >> in the latest filings we learned the 27 names of the partners. these people are holding key company. in the they have been with the company at least five years. we are learning nine of the so-called partners are women. six of them hold executive positions in alibaba. will be ableners to nominate the majority of the board when the company goes public. alibaba will be inviting new partners to join every year. we have learned there is going to be a partnership committee. they will all be sitting on the committee. their role is to administer partnership elections and bonus allocations every year. >> thank you.
to lucy mcdonald in the studio. take us through some of your picks in the technology sector. >> we like some of the digital advertising. that still seems to be seeing a lot of growth. youtube in particular. we like online travel. we have had for a while. that still seems to be growing in double digits. we are increasingly interested in how companies are going to measure the efficacy of their advertising online. a company like nielsen. advertising has always been something where it is weighted but we are never sure which half. sure which half is
wasted. >> you like microsoft. which part do you like? >> the cloud part and new management. still an undervalued business which is beginning to increase the pace of innovation. business which has a part of it which if separately quoted would be valued higher. where it fits these days? >> if the consultant. to us it looks interesting because it has been performing very well. would you have outsourcing? it looks as if their business is beginning to pick up. they are looking very strong.
they are very well placed we with moving companies and reengineering themselves for the digital world. many large companies have been under threat from the new bornups which have just into the digital world. these large companies are beginning to see they can also begin to reengineer themselves. those are big project. those are projects they will benefit from. >> some investors are interested in technology resale and excited by the prospect that might reveal in the future. they might be tempted by the likes of in alibaba ipo. is that something you will be evaluating? >> we will be evaluating very closely. it still has growth ahead of it. the question is how much is already discounted.
some companies on the move. alibaba sales have slowed. declined as the e-commerce giant spend more on marketing. the first revision shows revenue rose dirty nine percent compared to 71% for the same quarter a year earlier. -- 39% compared to 71% for the same quarter a year earlier. shell is selling most of its stake in woodside petroleum. assetlan to accelerate sales. they will eventually sell the 23% holding in australia's second-largest oil and gas producer because it was no longer strategic. fromve had earnings pressed nicholson. sales were just -- crest nicholson. company says demand remains high with an improving economic backdrop. coming up, the mint strikes
>> welcome back to "on the move ." we are 30 minutes into the trading day. let's see how things are shaping up. here is the picture across the market. over my shoulder that the european markets are trading in positive territory. isr in germany, the dax doing nicely. let's get to manus cranny. stocks i amtish going to focus on. we have easyjet, the budget airline in the united kingdom. they have had an upgrade. bloomberg industries says there is a huge amount of capacity coming from the budget airlines and the likes of iag, etc.
sharp fought -- shire pharmaceuticals, have that or haven't they? preparing takeover bids. we are waiting for a confirmation or not. good valueoms are fromoffee on the grow costa coffee brand. they are going to open 300 new stores and their first-quarter sales actually beat analyst estimates. coffee, the combination that makes the stock 3.6% higher. >> thank you very much. these are the bloomberg top headlines. the u.s. is sending almost 300
troops to increase security of its diplomatic posts in iraq. president obama is talking with leaders in iran about the response to the violence. the two nations have ruled out cord knitted millet -- cord ated militaryordin action. chinese investment falls unexpectedly. economists have been looking for a 3.2% gain. the fed will probably raise its benchmark interest rate faster than money market investors expect. that is according to a majority of economists surveyed by bloomberg news. fed officials begin a two-day meeting today in washington. let's return to our top story. siemens has made a formal counteroffer to general electric's bid. it is partnering with mitsubishi heavy industries for an offer
ge's bid.g -- christopher, thank you very much for joining us again. yesterday, you said you preferred ge's bid. now we have seen the details of siemens bid. are you still backing the americans on this one? bides, i still think ge's is the best for alstom. siemens is see from that it will not be the most convincing for alstom. will be torn apart in different companies and obviously it will not match alstom's expectations to become a key player. i have no doubt that ge will win this battle, only because it is the best deal.
alstom board of administrators and shareholders are backing ge. >> is this entirely in the hands of the alstom shareholders? see is thecan is still looking at siemens bid. top of the government, the president of france is not supporting the siemens bid and the government has no preference between siemens and ge. >> the siemens bid also seems to rely on bouygues, also a shareholder in alstom. they said yesterday they do not want to sell. how much traction do you think this siemens offer can get if one of the key players, albeit
on the sideline, might not label? -- might not play ball? >> siemens has no leverage to win this bid. es, with its shareholders, alstom is not ready to sell shares to mitsubishi. i do not see how siemens and when -- can win. the only thing we can see is that there will be some talks in the next days. at the end of the day, ge will win. will comethink ge back with a revised offer as a result of this? x yes. -- >> yes. ge might improve its offer. they might announce, in the coming days, some partnership with a french money -- a french company.
that would be something that might help the government to support ge's bid. >> thank you for joining us today. >> thank you very much. >> china's premier has begun his three-day visit to britain. joining us to take a look at what this means is manus cranny. the trip marks a positive set of relationships between china and britain. things have been strained in recent years. >> one could say in eight deep freeze. it is an official visit, but there is a bit of pomp and ceremony. you cannot beat that with a big stick. 200 liters from china will -- li with the catching kaching.
david cameron saying we have done more business with china in the past 12 months than in the past 30 years. it is important for both sides. li says he wants to change the misperceptions and misgivings of china. cameron, it is critically important that he changes his relationship. to give you a sense, $70 billion worth of bilateral trade between the two countries. government, exports have risen by some 50%. cameron has gone after the chinese trade. >> what kind of deals are we expecting from this? we have a little bit of insight. >> the banner headline for the press is 18 billion pounds worth. on tape this morning, they have said that they have signed a liquefied natural gas.
physical commitment as well as financial commitment. the biggest private investor from china committing to $1.5 billion of investments. for me, nuclear power. with twods along huge chinese players. they have a 30% holding in nuclear power in the united kingdom. they have the capital. you need infrastructure. are you compromising or are you just doing a smart, good he'll? -- deal? of me, creating the city london around where this bloomberg office sits thomas creating a dominant position in terms of trading. it is becoming a tour de force. >> they all want to be at the center of this offshore chinese currency trading. yuan% of all chinese
transactions are done right here in the u.k. we are expecting an announcement that the china construction bank will be announced as a clearing bank come a facilitating the buying and selling to transact business back home in china. firstthe ability to be and the strongest in terms of that financial position. bp, could bear, shell. >> the latest on that chinese visit. up next, it is the first letter you learn in school. it is a feature of the technology sector. more on the sharing economy coming up after the break. ♪
>> i am anna edwards in london. this is "on the move." here is a stock that is on the move. it is whitbread, the owner of a hotel and coffee chain here in the u k called costa coffee. it is up after it reported numbers for the first quarter. like for like sales beating estimates. as a result, that stock is moving higher. deutsche bank also saying this morning that the stock had been lagging behind some of its peers in recent trading as well. it is day 2 of london's head
week and we are focusing on the cloud. caroline hyde is live. over to you. >> thank you very much. axm joined by a partner in cel partners, one of the key investors in europe in the start out arena. -- the startup arena. we are here at the cloud world forum. give us a sense of some of the growth you are seeing within cloud computing, how you think it is helping companies start up . what are some ideas you are seeing? >> cloud computing is making i.t. easy. it is a very strong enabler for a lot of startups. they do not need a lot of capital to get their infrastructure going. do a pay-as-you-go basis and it makes it very easy to get a product going with very
little investment. that was a key driver in the past, five or six years to foster innovation. thatlk to us about some of innovation, some of the companies that you have been behind, growing. this is all about the sharing economy. how much growth is there? is it down to the fact that we all need to be saving money by sharing our cars? >> sharing economy is not about cars. it is really about value, providing a new service that did not exist in the past. if you look at some of the ,ompanies we are invested in you can buy used close -- clot hes. there is one new item every second on the marketplace. , you haveing company three empty seats, you can put them on the marketplace and
people can buy them. have members in 12 countries in europe doing one million -- s a month, which is more it is about changing people's lives and ways of living. it is more about the value and serviceon of the new more than just cost saving. >> and the value that you are giving, seed funding of a few million companies. what do these leaders then do with your money? is it about growth in technology and what do you tend to want to see your money being put to work for? >> usually, the money is put to work in the higher grade teams. we want the best engineers with the best products. if you want your start up to be successful, you need a unique product. a lot of money is invested in
sales and marketing to market the product. it depends on the model. if you are an e-commerce company, you will spend a lot more in marketing. if you are a community model, it is more about building your brand and building your awareness more than just buying keywords on google. >> give me a sense of the excitement you are seeing investing in europe. a --ave worked in silk on -- you have worked in silicon valley. what is the difference? valley, 30% will be on the east coast between new
york and boston. of water.llection you have london, berlin, moscow, istanbul, the nordic. you never know where the next it -- the next innovation is coming from. you have the nordics and you have super cell -- supercell, which was bought by three -- which was bought for 3 billion in a couple of years out of helsinki. we of these companies which have invested in are really spread out across europe and you never know where the next one is going to be. we have been in europe for about 15 years now. ago, investment was concentrated around the u.k. and israel.
it was 80% or a bit over. today, we are investing equally in all countries. there has been really big development across europe. >> this is london technology week. is london doing enough to support tech? should he be worried about the growth we are seeing in berlin, moscow? could we lose out in any way? >> london has been doing a great the especially all of airports around. london has been great. i do not think the growth of the other hubs will be a disadvantage. on the opposite. i think it has been great because it helps the u.k. expand across global businesses. i think all of this is additive. >> are we seeing enough money being pulled out of these big startups as they start to list? someve seen king.com and
other companies. is that positive because you get the money back into the investors hands? >> sure. you see the number in the past few years, it has been really exciting. inm, in europe and israel, all of it has been really additive and we will see a lot more of it going forward. rovio is in the pipeline. plenty of exciting things to come. >> do you expect any of your company's to be listing in the next few months? >> we cannot comment on that. we are long-term investors. we stayed in our companies for seven or eight years. we will do what is right for the company at the right time.
but you think the time is right for the investor base to be snapping up these share sales? >> oh yes. >> it has been wonderful speaking to you. fingers in numerous european highs when it comes to startups and those growth areas. we will be talking much more about cloud internet -- innovation and what startups are being grown i'm making it easy to start your startups. we will be speaking to microsoft in the next hour. acta you. >> thank you very much. "the pulse" is coming up at the top of the hour. guy johnson joins us to tell us what we will be looking out for. guessings they -- i am there will be more stargazing at the clouds. >> we are trying to use our imagination to turn the cloud into a series of great puns this morning. that is one of the challenges we face.
at night, you get stars and clouds at night. certainly in this country. chief envisioning officer will be joining us from microsoft. we will find out what he thinks about microsoft and where it goes from here. it is also men's fashion week in london. they call it london collections. i am not entirely sure why. we will leave that to one side for the moment. .e have the ceo of austino i hope i am pronouncing that correctly, francine lacqua, if you are watching. his take on how seriously we should take men's fashion. there's a lot of hype around this side of the industry. is it real? was it generate the top line or the bottom line? how do they see the future developing? we will figure that out and we will talk about what is happening in iraq. and we will talk about this transaction. go for alstom?o
>> welcome back to "on the move ." team usa scored its winning goal last night from a corner kick. it is something that can make or break a team's defense. we asked a professional player from the new york red bulls or his corner kick secrets. secrets.s corner kick ♪ >> and taking a corner kick, you are always factoring in a few things. the way the opponent defends, where the keeper is standing, and where you want to put the ball. i like to put the ball in the middle of the half circle. ball and usually look at my target. putke a few steps back and myself at a 45 to 90-degree
angle. , it you take a swing at it will curve the ball towards the goalkeeper, which is what you want. a lot of teams usually put the defender on the first post and second post. you want to avoid the guy on the first post because they are usually the guys to clear the ball out on you and you do not get a good corner kick. an want to put them in awkward position. once you do that, your attackers will have an advantage. you are always trying to score. on rare occasions are you see the actual kick-taker score. it rarely happens, but when it does, it is magical. >> here is a little picture of what happens in europe's stock markets right now. things a little higher this morning. we are fairly flat on the london markets, moving higher on the french, the german, and the spanish markets.
>> siemens strikes back. it is teaming up with mitsubishi heavy to derail ge's bid for alstom. we will bring you a live news conference. >> the chinese premier kicks off his u.k. visit. >> and boots on the ground. troops toends armed help combat the growing insurgency. ♪ >> good morning, everybody. you are watching "the pu"